Congratulations! You’ve worked hard this year. You made it through some tough days (or weeks or months). And now, if you’re lucky, you might end up with a holiday bonus.
But before pocketing that hard-earned boost to the bottom line, it’s worth taking a moment to think about how you want to use it. Here are some things to keep in mind.
- Save yourself a headache later. Americans are saving more this year, having learned to expect the unexpected. But if it’s been a while since you last topped off your emergency fund, it’s not too late to start. Aim to have a fund that can cover at least three months of expenses (and in a best-case scenario, six months or more).
Everyone encounters financial bumps in the road, whether it’s roof damage from a sudden storm, a late-night trip to the emergency room or a car that just won’t start. When that happens, having a bonus to fall back on can be a big relief. - Shake off debt, if you have it. With the holiday season approaching, more than one in three Americans expect to take on some extra debt. Don’t have to be among them.
Using a bonus to pay off debt – whether it’s credit card debt, a car loan, tuition payments or something else – is a popular choice. That’s not surprising: It feels good to pay off a big chunk of debt all at once. Plus, it frees up cash down the road by reducing the amount of interest.
- Give “future you” a gift. Whatever you’re looking forward to – college, financing a home, a bucket-list trip, or a comfortable, worry-free retirement – plan now to ensure smooth sailing for the years ahead.
Already on top of your savings? Then bolster your bonus with a responsible, low-risk investment. From Certificates of Deposit to high-yield savings accounts, a number of simple options allow you to sit back, relax and enjoy the season while your money grows. - It’s not all or nothing. “A penny saved is a penny earned” is a good motto to live by. But that doesn’t mean you have to save every penny you earn.
Your bonus should be a reason to celebrate. After setting aside a portion for savings, debt payments or long-term goals, don’t forget to treat yourself with the remainder.
At Axiom, we’re all about finding ways to make every day financial decisions a little easier. That’s why we offer a range of ways to save, invest and manage your money – and the guidance of trusted experts at every local branch of our community bank.
Axiom Bank, N.A., a nationally chartered community bank headquartered in Central Florida, provides retail banking services, including checking, savings, money market and CD accounts, as well as commercial banking, treasury management services and commercial loans for both real estate and business purposes.
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